SERVICES Analysis of Lost Earning Capacity
Personal injury cases require a detailed examination of the subject’s preinjury employment and earnings and the economic factors that would likely influence the income in future years. Post injury prospects must also be considered. Collaboration with a vocational or rehabilitation expert is often required. In wrongful death cases, the personal consumption expense and savings from income of the subject are necessary considerations in calculating lost support to survivors. The value of lost fringe benefits are often important calculations in both injury and death cases. Numerous items of personal information, tax returns, vocational reports, industry and government data are used in developing lost earnings or support reduced to present value.
Net Accumulations to the Estate
This is an economic loss that is calculated for many wrongful death cases. Future income growth, personal consumption, savings rates, and return on investment are all factors included in the calculation.
Medical and Rehabilitation Expenses
Lost earnings usually end upon assumed retirement. But medical expenses and support care may be required until the end of life. These expenses may include medicines, physician services, special equipment, pain management, wheelchair vans, therapies, and custodial care. A life care plan is often prepared that describes in detail the many items needed. Cost increases vary considerably and are derived from the detailed reports of the Consumer Price Index. Cost projections are reduced to present value.
The Value of Lost Household Services
The services provided by individuals for themselves and their households add greatly to their economic well being. The loss of the household services provided by a particular family member could result in significant economic loss. The valuation of lost household services requires the conversion of income “in kind” to its market equivalent “in cash.”
Economic damages to a business usually result in lost profits. A business may be damaged by such actions or events as imminent domain, contract default, product failure, lender default, patent infringement, tortious interference, anticompetitive practices, or other wrongful acts. A calculation of profits “but for” the wrongful act is required.